The U.S. listing gap
The U.S. had 14% fewer exchange-listed firms in 2012 than in 1975. Relative to other countries, the U.S. now has abnormally few listed firms given its level of development and the quality of its institutions. We call this the “U.S. listing gap” and investigate possible explanations for it. We rule out industry changes, changes in listing requirements, and the reforms of the early 2000s as explanations for the gap. We show that the probability that a firm is listed has fallen since the listing peak in 1996 for all firm size categories though more so for smaller firms. From 1997 to the end of our sample period in 2012, the new list rate is low and the delist rate is high compared to U.S. history and to other countries. High delists account for roughly 46% of the listing gap and low new lists for 54%. The high delist rate is explained by an unusually high rate of acquisitions of publicly-listed firms compared to previous U.S. history and to other countries.
We thank participants at the Florida State University SunTrust Beach Conference, and at seminars at Cornell University, Dimensional Fund Advisors, the Board of Governors of the Federal Reserve, and the University of Oklahoma for helpful comments. We are grateful to Brian Baugh, Andrei Gonçalves, and Xiaofei Zhao for excellent research assistance, to Scott Yonker for valuable comments, and to Frank Hatheway (NASDAQ) for a useful conversation. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
René M. Stulz
René Stulz serves on the board of a bank and consults and provides expert testimony for financial institutions.
- The total number of listed companies fell from 8,000 to 4,100 from 1996 to 2012, while the rest of the world saw an increase from 30,...
Craig Doidge & G. Andrew Karolyi & René M. Stulz, 2017. "The U.S. listing gap," Journal of Financial Economics, vol 123(3), pages 464-487. citation courtesy of